Guidance Note

ACCESS TO AUDIT
WORKING PAPERS OF A
PREDECESSOR AUDITOR
Issued by
The Malaysian Institute of Certified Public Accountants

February 2023
Contents
DESCRIPTION PARAGRAPHS
Introduction 1–3

Applicability 4

Definitions 5–7

General Considerations

Access to Audit Working Papers of a Predecessor Auditor 8-9

Practicalities of Access 10 - 14

Legal Professional Privilege 15 - 18

Access and Risk

• Confidentiality 19 - 20

• Auditor Indemnity 21 - 23

• Releases and Waivers of Reliance from Successor Auditors 24 - 28

Relevant Information 29

Procedures 30

Other Considerations

• Timing of Access 31 - 32

• Cost 33 - 36

Relevant Auditing Standards 37 - 41

Appendices:

Illustrative Letter A: Illustrative Letter B:

Predecessor Auditor’s Client Consent Letter to Predecessor Auditor’s Terms of Access to Allow Access
Allow Successor Auditor Access to Audit Working to Audit Working Papers by the Successor Auditor
Papers
 MICPA GUIDANCE NOTE 1

Introduction
1 The Malaysian Institute of Certified Public Accountants’ (“MICPA”) has approved this guidance
note “Access to Audit Working Papers of a Predecessor Auditor” (“Guidance Note”) for issuance
to members as part of our effort to strengthen audit quality, safeguard public interest and
uphold the reputation of the profession. The protocols set out in this Guidance Note were
concluded after consultation with practitioners within the context that practitioners grant access
to audit working papers to a Successor Auditor arising from a change in auditors.

2 The purpose of this Guidance Note is to provide guidance to a Predecessor Auditor when
agreeing the terms under which a Successor Auditor is granted access to the Predecessor
Auditor’s audit working papers and related documentation respectively. Such audit working
papers are prepared to enable an understanding of the nature, timing and extent of the audit,
results of the audit and evidence, and significant matters arising during the audit and the
conclusions reached thereon, in accordance with the Approved Standards on Auditing in Malaysia.

3 This Guidance Note is intended to facilitate an efficient and effective arrangement between a
Predecessor Auditor and a Successor Auditor, when request for access to audit working papers
is made in the circumstance of a change in auditors. Audit working papers remain property of
the Predecessor Auditor, and he may, at his discretion, grant, decline or restrict access to the
audit working papers unless otherwise required by legislative, regulatory or other legal requirements.
For example, a Predecessor Auditor may exercise his discretion to restrict or decline access to
the audit working papers if significant audit fees remain outstanding, or if litigation is involved
or threatened.

Applicability
4 This Guidance Note is applicable to a situation where a Successor Auditor requests for access
to the Predecessor Auditor’s audit working papers with respect to an audit of financial statements
as required by the Companies Act 2016.
 2 MICPA GUIDANCE NOTE

Definitions
5 For the purposes of this Guidance Note:

a) “audit” refers to an audit of financial statements as required by the Companies Act 2016.

b) “audit working papers” include:

(i) documents, schedules and any other records, produced or obtained (whether from the
Client or third parties) by the Predecessor Auditor during an audit engagement, that
are created and utilised to carry out the audit engagement and fulfill the Predecessor
Auditor’s responsibilities under that audit engagement;
(ii) copies of documents, schedules and any other records produced by the Client and
used by the Predecessor Auditor to carry out an audit engagement;
(iii) documents and any other records created by the Predecessor Auditor internally to
support audit procedures or conclusion, such as memorandums and external
correspondence with the Client or third parties;
(iv) audit work programmes that support the audit conclusion;
(v) internal control documentation; and
(vi) any other records contained in an audit file in support of audit procedures or conclusion.

Information included in audit working papers may be in any form, including handwritten
data, text, image or audio, and may be stored electronically or in hard copy.

c) An “audit file’ is a file that contains the audit working papers as defined in paragraph 5 b)
above. Documents that are excluded for the purposes of granting access to a Successor
Auditor, are listed in paragraph 6 below.

d) “Client” means a former client of the Predecessor Auditor and current client of the Successor
Auditor.

e) Except where mandatorily required by the relevant laws and as limited by the Disclaimer
in this Guidance Note, “shall” is to be construed as permissive and not mandatory in nature,
but connoting a recommendation to meet the standard or intent of this Guidance Note.

f) Words importing a gender shall include any gender.

 MICPA GUIDANCE NOTE 3

Definitions (Cont’d.)

5 For the purposes of this Guidance Note: (Cont’d.)

g) “legal professional privilege” means a privilege that protects certain communications between
the Client, their legal advisers and / or relevant third parties from disclosure without the
Client’s written consent specifying the details of the documents to be disclosed.

6 For the purposes of this Guidance Note, the following documents that are ordinarily contained
in an audit file, do not form part of the audit working papers of the Predecessor Auditor to be
accessed by the Successor Auditor:

a) The Predecessor Auditor’s internal budgeting documents relating to costing or billing for
the Client;

b) The Predecessor Auditor’s staffing documents for the audit engagement and other personnel
records about the audit engagement team;

c) Matters that are subject to legal professional privilege; and

d) Proprietary work programmes, for example, Client acceptance checklists, internal firm
independence review checklists, and documentation in respect of system of quality
management. The Predecessor Auditor may consider what constitutes the proprietary work
programmes.

The list above is illustrative and not exhaustive.

7 For the purposes of this Guidance Note, documents contained in an audit file may be subject
to “legal professional privilege” because the Client, or relevant laws or regulations, at the time
it was originally provided, require that such information or audit working papers be legally
privileged. An example of this is legal advice regarding litigation against the Client provided by
their legal advisers. Paragraphs 15 to 18 of this Guidance Note further elaborates the details
of legal professional privilege.
 4 MICPA GUIDANCE NOTE

General Considerations
ACCESS TO AUDIT WORKING PAPERS OF A PREDECESSOR AUDITOR
8 A newly appointed auditor, i.e. a Successor Auditor of an entity which is required to perform
an audit, has a statutory responsibility to report on the financial statements of the entity in the
year of appointment pursuant to the provisions of the Companies Act 2016.

9 A Predecessor Auditor who receives a request for access to his audit working papers is required
to consider the following matters:

a) Practicalities of Access: Paragraphs 10 to 14 provide guidance on the format, extent and

location of access;

b) Legal Professional Privilege: Paragraphs 15 to 18 provide guidance on how to determine

whether the audit working papers contain information that are subject to Legal professional
privilege, in which case such information should not form part of the audit working papers
to be accessed by the Successor Auditor. If the information belongs to the Client, consent
shall be obtained from the Client before providing access to such information;

c) Access and Risk:

(i) Confidentiality: Paragraphs 19 to 20 discuss confidentiality in relation to access to

audit working papers;

(ii) Risk of legal claims resulting from granting access: Ensuring appropriate legal protection
to mitigate such risks as securing indemnities, which may be required depending on
the circumstances governing the request. Such appropriate legal protection may be
in the form of the release, waiver or indemnity, and the appropriate sequence of
indemnities between the Predecessor Auditor, the Client and Successor Auditor
(see paragraphs 21 to 28);

d) Legal Obligation: The protocols contained in this Guidance Note shall be adapted to the
specific circumstances faced by the Predecessor Auditor, who is required to discharge his
legal obligations in accordance with applicable legislative requirements including the Personal
Data Protection Act 2010, Anti-Money Laundering, Anti- Terrorism Financing and Proceeds
of Unlawful Activities Act 2001 (“AMLA”) and Companies Act 2016. It is important that
the Successor Auditor does not, for instance, disclose the fact of a suspicious transaction
or related information in connection to an investigation pursuant to AMLA (“tipping-off”)
arising from the access of the Predecessor Auditor’s audit working papers.
 MICPA GUIDANCE NOTE 5

General Considerations (Cont’d.)

ACCESS TO AUDIT WORKING PAPERS OF A PREDECESSOR AUDITOR (CONT’D.)

9 A Predecessor Auditor who receives a request for access to his audit working papers is required
to consider the following matters: (cont’d.)

e) Relevant Information: This is information which falls under the period between the completion
of the audit and the date on which the appointment of the Predecessor Auditor ceases
(see paragraph 29).

f) Procedures: Matters on procedures can be included as terms of access (see paragraph 30

and Illustrative Letter B).

g) Other Considerations: These include timing of access, cost and other relevant information
(see paragraphs 31 to 36).

PRACTICALITIES OF ACCESS
10 Request for access to a Predecessor Auditor’s audit working papers shall be made in writing
copying the Client. The written request for access to audit working papers may be sent to the
Predecessor Auditor and addressed to the firm of the Predecessor Auditor as the auditor, marked
for the attention of the engagement partner who had signed off for that audit. In the event the
engagement partner has resigned or retired, the managing partner of the firm will be responsible
for granting access to the firm’s audit working papers to the Successor Auditor.

11 Both the Predecessor Auditor and Successor Auditor need to establish a clear understanding on
which audit working papers will be provided.

12 Both the Successor Auditor and Predecessor Auditor seeking and granting access to audit working
papers respectively shall endeavor to do so in a timely manner so as to minimise costs on them.

13 A Predecessor Auditor may restrict access of some of his audit working papers to the Successor
Auditor, which could be subject to legal professional privilege. In such instance, the Predecessor
Auditor shall inform the Successor Auditor that certain audit working papers have been withheld
without disclosing any details of that information, such as documents and information that are
subject to legal professional privilege (see paragraphs 15 to 18). If the Successor Auditor requires
further documents and information, the Successor Auditor may seek clarification from the
Predecessor Auditor or alternatively seek clarification from the Client accordingly.
 6 MICPA GUIDANCE NOTE

General Considerations (Cont’d.)

PRACTICALITIES OF ACCESS (CONT’D.)

14 When access to a Predecessor Auditor’s audit working papers is provided, the Predecessor Auditor
shall decide and control the manner in which access is to be administered. The Predecessor
Auditor will:

a) agree on the format, for example, electronic or hard copy, with the successor auditor in
which access to the Predecessor Auditor’s audit working papers will be granted. The
Predecessor Auditor is entitled to decide on the format so as to avoid breach of confidentiality
of any of his proprietary information and methodologies, as well as other confidential
information of the Client (see paragraphs 19 to 20);

b) agree on and control the extent of access to original audit working papers granted to the
Successor Auditor;

c) oversee the inspection of audit working papers;

d) request that any questions arising from the access of the audit working papers be raised
in writing. The Predecessor Auditor’s response will be restricted to matters in the audit
working papers, rather than for example, answering questions of a general nature or matters
concerning events subsequent to the reporting period covered by the audit engagement;

e) disallow making copies of audit working papers without specific consent from the Predecessor
Auditor. If permission to make copies of audit working papers is granted, the Predecessor
Auditor is recommended to:

(i) maintain control over which audit working papers can be copied;

(ii) review all audit working papers that are to be copied, prior to making them available
to the Successor Auditor;

(iii) maintain a record of which audit working papers have been copied; and

(iv) consider charging for the cost of making copies of the requested audit working papers;
and

f) determine the location of access to audit working papers.

 MICPA GUIDANCE NOTE 7

General Considerations (Cont’d.)

LEGAL PROFESSIONAL PRIVILEGE

15 In executing an audit engagement, a Predecessor Auditor may incorporate within his audit file
confidential documents prepared by, or confidential communications made between his Client
and legal advisers. When the purpose of these communications is for the Client’s legal advisers
to provide legal advice or opinion to the Client or where the confidential documents have been
created in relation to existing or anticipated legal proceedings, such communications or documents
may be subject to legal professional privilege.

16 Legal professional privilege belongs to the Client and not the Predecessor Auditor. The Predecessor
Auditor is obligated to protect the rights of confidentiality unless waived by the Client. When
access to audit working papers is being evaluated, the Predecessor Auditor needs to consider
obtaining legal advice from his own legal advisers as to how to manage documents or information
that may be subject to legal professional privilege. The Client shall also be provided an opportunity
to review all documents and information that are to be furnished so that the Client can evaluate
whether a claim for legal professional privilege will be made in relation to specified documents.

17 The following documents and information may fall under legal professional privilege:

a) correspondence between the Client and his legal advisers and / or third parties, made for
the dominant purpose of giving or receiving legal advice, or for use in existing or anticipated
litigation, that has been provided to the Predecessor Auditor for the audit engagement;

b) opinions from the legal adviser, and associated billing costs, including details of legal costs,
where such information would disclose the nature of the legal advice sought or given;

c) correspondence between the Predecessor Auditor and the Client’s legal adviser; and

d) documents that include the types of documents listed in (a) to (c) above.

18 If any of the documents or information listed in paragraph 17 above are included in the audit
working papers, or if the Predecessor Auditor is in any doubt about whether any Client documents
or information are subject to legal professional privilege, the Predecessor Auditor shall notify
his Client. In these circumstances, the Predecessor Auditor may also need to consult with his
own legal adviser in order to appropriately identify the status of documents and information
that could potentially be the subject of legal professional privilege, subject to the consent of
the Client for disclosure of the documents which involve the Client in question to the Predecessor
Auditor’s legal adviser.
 8 MICPA GUIDANCE NOTE

General Considerations (Cont’d.)

ACCESS AND RISK

Confidentiality
19 Before the Predecessor Auditor provides access to his audit working papers to the Successor
Auditor, the Client’s consent is necessary to ensure the Predecessor Auditor complies with his
duty of confidentiality to the Client, as well as confidentiality pursuant the Code of Ethics of
MICPA (or any other equivalent ethical requirements to which the Predecessor Auditor is subject)
and any contractual arrangement between the Predecessor Auditor and the Client. Unless consent
is given in writing, (see Illustrative Letter A), the Predecessor Auditor shall not voluntarily grant
access to the Successor Auditor except where required by law.

20 The letter of consent required from the Client needs to be signed by a person(s) appropriately
authorised to legally bind the Client such as the director of the Client. If the Client gives consent
under a power of attorney, the Predecessor Auditor should verify the power of attorney by
conducting a search with the Courts of Malaysia.

Auditor Indemnity
21 Generally, pursuant to Section 288 of the Companies Act 2016, any form of agreement with a
Client which exempts an auditor from, or indemnifies an auditor against liability to the Client
for negligence, breach of duty or breach of trust, shall be void.

22 Section 289 of the Companies Act 2016, however, provides the limited exceptions under which
a Client may indemnify an auditor against liability arising from his conduct in his capacity as
auditor, or effect insurance for the auditor to cover him against such liability.

23 An auditor should ensure that an express written indemnity clause is included in the engagement
letter of the auditor with the Client. Within legal limits, the indemnity clause may mitigate against
claims either during the tenure as the Successor Auditor or Predecessor Auditor of the Client.

Releases and Waivers of Reliance from Successor Auditors

24 Audit working papers that form part of an audit file are ordinarily prepared for the sole purpose
of an audit. Consequently, audit working papers may not be suitable for any other intended use
by a Successor Auditor, as the scope and nature of the Successor Auditor’s needs are not known
by the Predecessor Auditor, and thus, do not form part of the scope of the audit.
 MICPA GUIDANCE NOTE 9

General Considerations (Cont’d.)

ACCESS AND RISK (CONT’D.)

Releases and Waivers of Reliance from Successor Auditors (Cont’d.)

25 Access to the audit working papers by a Successor Auditor, without receipt of appropriate
releases and waivers of reliance, may place the Predecessor Auditor at risk of a legal claim by
the Successor Auditor based on its access to the audit working papers. Accordingly, it will not
be prudent for the Predecessor Auditor to grant such access to his audit working papers, unless
the Predecessor Auditor has:

a) obtained the Client’s consent letter; and

b) agreed terms of access with the Successor Auditor in writing, including appropriate releases.

26 To mitigate risk in the event access is provided to audit working papers, the consent letter (see
Illustrative Letter A) includes an express disclaimer of reliance and exclusion of liability.

27 The Illustrative Letters in Appendix include a recommended form of release and waiver of reliance
that a Predecessor Auditor ordinarily seeks when responding to a request to access his audit
working papers.

28 The Illustrative Letter B in Appendix is designed to facilitate access to a Predecessor Auditor’s audit
working papers whenever access is sought by a Successor Auditor. The Illustrative Letter records
the agreed basis on which a Predecessor Auditor may be prepared to provide access to his audit
working papers to a Successor Auditor. Access may be denied to the Successor Auditor if the terms
of access (see Illustrative Letter B) is not executed and obtained from Successor Auditor.

RELEVANT INFORMATION
29 Relevant information (referenced in paragraph 9e) as one of the matters to be considered by
the Predecessor Auditor when he receives a request for access to his audit working papers)
refers to information that comes to the knowledge of, or into the possession of the Predecessor
Auditor between the completion of the audit and the date on which his appointment as an
auditor ceases. Though the Successor Auditor may enquire about this information, it should be
recognised that the Predecessor Auditor may not have been made aware of all matters that
might be relevant to the first audit of the Successor Auditor.
 10 MICPA GUIDANCE NOTE

General Considerations (Cont’d.)

PROCEDURES
30 Where the Predecessor Auditor agrees to provide the Successor Auditor access to his audit
working papers, such access ordinarily involves an exchange of letters between the two auditors.
Illustrative Letter B in Appendix sets out the matters ordinarily addressed, though amendments
may be required to reflect circumstances specific to the audit engagement.

OTHER CONSIDERATIONS
Timing of Access
31 Request for access to audit working papers needs to be reasonable without causing either party
undue resourcing or timing difficulties. Both Predecessor Auditor and Successor Auditor shall
agree on a reasonable period of time during which the Successor Auditor can have access to
the audit working papers.

32 Access shall be requested after the appointment of a Successor Auditor to the entity has been
completed. In the normal course, request for access to audit working papers may be made soon
after the appointment of a Successor Auditor at the planning stage of its first audit. Correspondingly,
the Predecessor Auditor grants access within a reasonable amount of time from the receipt of
such request.

Cost
33 With respect to the cost incurred for providing access to audit working papers, fees charged
shall be reasonable to commensurate with the Predecessor Auditor’s effort.

34 Fees charged can be justified on the basis that without charging such fees to a Successor Auditor,
provision of access to audit working papers creates an unnecessary and unreasonable burden
on the Predecessor Auditor. It may be reasonable to charge for the cost incurred for:

a) photocopying documents;

b) paying an individual to make the copies;

c) retrieving documents from archive sources and compiling information;

d) assigning an individual to attend to queries and observe the review process; and

e) any other reasonable relevant costs.

 MICPA GUIDANCE NOTE 11

General Considerations (Cont’d.)

OTHER CONSIDERATIONS (CONT’D.)

Cost (Cont’d.)

35 Subject always to paragraph 33 above, in determining the fees, the Predecessor Auditor may
take into account the potential risks, including the possibility that providing access to the audit
working papers:

a) may affect the reasonableness of the denial of responsibility in respect of the provision of
that information and its use; and

b) may increase the prospect of a Predecessor Auditor being taken to have assumed a duty of
care to the Successor Auditor in relation to the provision of that information and its use.

36 The reasonable fee can be defined as the standard rates of the Predecessor Auditor.

Relevant Auditing Standards

37 ISA 300 Planning an Audit of Financial Statements, ISA 510 Initial Audit Engagements - Opening
Balances and ISA 710 Comparative Information – Corresponding Figures and Comparative Financial
Statements referred to in this Guidance Note underpin the work of a Successor Auditor who
needs to develop the overall audit strategy and audit plan and obtain sufficient appropriate
evidence about the opening balances and ensure consistency of accounting policies.

38 The following paragraphs of ISA 300 Planning an Audit of Financial Statements are relevant when
a Successor Auditor is performing an audit of a Client for the first time.

a) Pursuant to paragraph 13 of ISA 300 Planning an Audit of Financial Statements, a Successor

Auditor shall undertake the following activities prior to starting an initial audit:

(i) performing procedures required by ISA 220 (Revised) Quality Management for an Audit
of Financial Statements regarding the acceptance of the Client relationship and the
specific audit engagement; and

(ii) communicating with the Predecessor Auditor, where there has been a change of
auditors, in compliance with relevant ethical requirements.
 12 MICPA GUIDANCE NOTE

Relevant Auditing Standards (CONT’D.)

38 The following paragraphs of ISA 300 Planning an Audit of Financial Statements are relevant when
a Successor Auditor is performing an audit of a Client for the first time. (cont’d.)

b) According to paragraph A22 of ISA 300 Planning an Audit of Financial Statements, the
purpose and objective of planning the audit are the same whether the audit is an initial
or recurring engagement. However, for an initial audit, the Successor Auditor may need to
expand the planning activities because the Successor Auditor does not ordinarily have the
previous experience with the entity that is considered when planning recurring engagements.
For an initial audit engagement, additional matters the Successor Auditor may consider in
establishing the overall audit strategy and audit plan include the following:

(i) unless prohibited by law or regulation, arrangements to be made with the Predecessor
Auditor, for example, to review the Predecessor Auditor’s audit working papers.

(ii) any major issues (including the application of accounting principles or of auditing and
reporting standards) discussed with management in connection with the initial selection
as Successor Auditor, the communication of these matters to those charged with
governance and how these matters affect the overall audit strategy and audit plan.

(iii) the audit procedures necessary to obtain sufficient appropriate audit evidence regarding
opening balances.

(iv) other responses designed and implemented by the firm for initial audit engagements
(e.g., the firm’s system of quality management may include responses that require
another partner or individual with appropriate authority to review the overall audit
strategy prior to commencing significant audit procedures or to review reports prior
to their issuance).

39 ISA 510 Initial Audit Engagements – Opening Balances is relevant when an auditor is performing
an audit of a Client for the first time. Pursuant to paragraph 3 of ISA 510 Initial Audit Engagements
– Opening Balances, in conducting an initial audit engagement, the objective of the Successor
Auditor with respect to opening balances is to obtain sufficient appropriate audit evidence
about whether:

a) opening balances contain misstatements that materially affect the current period’s financial
statements; and

b) appropriate accounting policies reflected in the opening balances have been consistently
applied in the current period’s financial statements, or changes thereto are appropriately
accounted for and adequately presented and disclosed in accordance with the applicable
financial reporting framework.
 MICPA GUIDANCE NOTE 13

Relevant Auditing Standards (CONT’D.)

40 The financial statements to be audited by a Successor Auditor will be affected by the account
balances carried forward from the previous reporting period on which the Predecessor Auditor
issued an audit report. Consequently, the Successor Auditor will need to obtain sufficient
appropriate evidence as to whether the opening balances for the reporting period are fairly
stated in accordance with ISA 510 Initial Audit Engagements - Opening Balances. For this purpose,
access to the Predecessor Auditor’s audit working papers may be obtained.

41 Pursuant to paragraph 7 of ISA 710 Comparative Information – Corresponding Figures and

Comparative Financial Statements, the Successor Auditor shall determine whether the financial
statements include the comparative information required by the applicable financial reporting
framework and whether such information is appropriately classified. For this purpose, the
Successor Auditor shall evaluate whether:

a) the comparative information agrees with the amounts and other disclosures presented in
the prior period or, when appropriate, have been restated; and

b) the accounting policies reflected in the comparative information are consistent with those
applied in the current period or, if there have been changes in accounting policies, whether
those changes have been properly accounted for and adequately presented and disclosed.
Appendices
 MICPA GUIDANCE NOTE 15

ILLUSTRATIVE LETTER A

PREDECESSOR AUDITOR’S CLIENT CONSENT LETTER TO ALLOW SUCCESSOR AUDITOR ACCESS

TO AUDIT WORKING PAPERS

The following illustrative letter is forwarded to the auditor’s client in connection with a request by a
Successor Auditor, when seeking to access the audit working papers of the Predecessor Auditor.

Predecessor Auditor’s Letterhead

[Date]

[Client]
[Address]
Dear [client contact person]

In connection with the appointment of [Successor Auditor] as the statutory auditor of [name of the
entity to be audited by the Successor Auditor], we have been requested to make the audit working
papers of [name of the entity audited by the Predecessor Auditor] for the financial year ended
[financial year end] available for review by [Successor Auditor] and at our discretion to provide
them with explanations where we consider it appropriate to do so (“Additional Explanations”). This
letter sets out the basis on which we are prepared to grant access to our Audit Working Papers and
any Additional Explanations to [Successor Auditor].

You acknowledge that the Audit Working Papers and any Additional Explanations relate to the work
that was undertaken by [name of firm] under the terms and conditions contained in our engagement
letter dated [date]. Accordingly, the Audit Working Papers (including Additional Explanations) and
the scope of our work may not be sufficient or appropriate for the purposes for which [Successor
Auditor] has requested access.

We agree to make the Audit Working Papers and any Additional Explanations available to [Successor
Auditor] if they sign a letter which will be communicated to them separately, confirming the terms
on which we are willing to provide access.

To the maximum extent permitted by law:

a) we are not responsible to you or any other party for any loss you or any other party may suffer
in connection with the access to or use of the Audit Working Papers and any Additional Explanations
by [Successor Auditor].
 16 MICPA GUIDANCE NOTE

b) you agree to release and discharge [name of audit firm of the Predecessor Auditor], its partners,
officers and employees from, and not assert against us, any action, liability, claim, suit, demand,
claims for costs or other expenses or any other proceedings arising out of, or in connection with,
the release of our Audit Working Papers and any Additional Explanations to [Successor Auditor].

c) you will indemnify [name of audit firm of the Predecessor Auditor], its partners, officers and
employees against any loss, action, liability, claim, suit, demand, claim for costs or expenses or any
other proceeding we may suffer arising out of, or in connection with, access to the Audit Working
Papers and any Additional Explanations by [Successor Auditor] to the extent permitted by law.

The terms of this letter are governed by Malaysia law and each party is to submit to the exclusive
jurisdiction of the Malaysia courts in connection with any dispute or difference arising out of, in
connection with or relating to this letter.

By signing, dating and returning this letter to us, you acknowledge that you consent and agree to
these terms and to the release of the Audit Working Papers and any Additional Explanations to
[Successor Auditor].

Yours sincerely

[Signature of Partner]
[Audit Firm]

We consent to the Audit Working Papers being made available to [Successor Auditor] and for you
to provide any Additional Explanations and accept the terms set out above on which such access will
be provided.

You have our consent to bill any time and other costs to us at your standard rate and we agree to
promptly pay such bills, I confirm I am duly authorised by the company and have the necessary
authority to commit the company to these terms.

[Signature of Client’s Authorised Officer(s)]

[Date]
 MICPA GUIDANCE NOTE 17

ILLUSTRATIVE LETTER B

PREDECESSOR AUDITOR’S TERMS OF ACCESS TO ALLOW ACCESS TO AUDIT WORKING

PAPERS BY THE SUCCESSOR AUDITOR

The following illustrative letter can be modified to the specific client circumstances. A client consent
letter (Illustrative Letter A) is required before this letter can be issued.

Predecessor Auditor’s Letterhead

[Date]

[Successor Auditor]
[Address]
Dear [Name of newly appointed auditor]

You have asked for access to our audit working papers for the statutory audit of [name of entity]
for the year ended [preceding financial year end] (the “Audit Working Papers”) in connection with
your appointment as the statutory auditor of [name of entity] for the year ended [current financial
year end]. You have also asked us to answer any questions you may have in relation to the Audit
Working Papers (“Additional Explanations”) where we consider it appropriate to do so. We have
obtained written consent from [name of entity] for the purpose of granting you access to the Audit
Working Papers.

This letter sets out the terms on which we are prepared to grant you access to the Audit Working
Papers and to provide you with the Additional Explanations. You acknowledge and agree that:

1. You may only use the Audit Working Papers and Additional Explanations in connection with
your audit of [name of entity] for the year ended [current financial year end].

2. You will make a request for any Additional Explanations in writing.

3. Our work was performed and the Audit Working Papers were prepared in connection with our
role as the statutory auditor of [name of entity] for the year ended [preceding financial year
end] in accordance with the provisions of the Companies Act 2016 and for no other purpose.

4. The Audit Working Papers or any Additional Explanations may not be sufficient or appropriate
for your purposes. This is because in performing our statutory audit of [name of entity] for the
year ended [preceding financial year end] we may not have addressed matters in which you
[or entity] may be interested or other inherent limitations in the audit of financial statements
such as use of professional judgement and assessment of materiality may be assessed differently
regarding [name of entity]. You therefore agree it is your responsibility to ensure compliance
with the Approved Standards on Auditing in Malaysia, particularly with regard to your sole
responsibility for the opinion expressed on the financial statements of [name of entity] for the
year ended [current financial year end].
 18 MICPA GUIDANCE NOTE

5. The Audit Working Papers and any Additional Explanations relate to the year ended [preceding
financial year end]. We are not engaged to report on the financial statements of [name of
entity] for any period subsequent to the year ended [preceding financial year end]. Events
may have occurred since that date which may impact on the information contained in the Audit
Working Papers or your statutory audit of [name of entity].

6. We are not responsible to you or any other party for any loss you or any other party may suffer
in connection with your access to or use of the Audit Working Papers or any Additional
Explanations. You will hold us harmless against all actions, proceedings and claims brought or
threatened against us (whether by the Company or any other third party), and all loss, damage
and expense (including legal expenses) relating thereto, in any way arising out of or in connection
with your access to or use of the Audit Working Papers and any Additional Explanations made
in relation thereto.

7. The Audit Working Papers and any Additional Explanations are confidential information and will
be treated as such by you. They will not be copied or used for any other purpose or disclosed
or distributed to anyone (other than disclosure as required by law), without our prior written
consent, which may be granted at our absolute discretion and may be subject to conditions.

8. We reserve the right to withhold any information from the Audit Working Papers which is
confidential to us. Accordingly, unless otherwise required by law, we reserve the right to remove
files from our Audit Working Papers relating to practice management issues such as budgets,
time / cost records, proprietary software, staffing records, and any other information that is
confidential to us, or is subject to legal professional privilege.

9. You have sole responsibility for any opinion expressed, or any advice you give [name of entity]
on the financial statements of [entity] for the year ended [current financial year end] or any
other period.

10. You will not name us in any financial statements or document which will be publicly available
or lodged or filed with any regulator without our prior written consent, such consent will be
granted at our absolute discretion and may be subject to conditions.

11. You will not comment, orally or in writing, to anyone as a result of your access to or use of the
Audit Working Papers or any Additional Explanations on whether our Audit Working Papers
were performed in accordance with the Approved Standards on Auditing in Malaysia or any laws
and regulations. You therefore agree you will not provide expert testimony or litigation support
services or otherwise accept an engagement to comment on issues relating to the quality of or
findings from our Audit Working Papers.

12. Access to the Audit Working Papers and any Additional Explanations are not provided pursuant
to any agreement or arrangements of a contractually binding nature between our firms. You
have not acquired any rights against us or otherwise as a result of such access or as a result
of what the Audit Working Papers contain.
 MICPA GUIDANCE NOTE 19

13. The terms of this letter are governed by Malaysia law and each party is to submit to the exclusive
jurisdiction of the Malaysia courts in connection with any dispute or difference arising out of,
in connection with or relating to this letter.

14. [The review will be conducted via a communication platform (such as Microsoft Teams,
Skype, Webex or Zoom) as mutually agreed by both parties. During our presentation of the
Audit Working Papers and Additional Explanations to you via such platform, you will not
take any photograph, screenshot, video, or recording of the Audit Working Papers and
Additional Explanations or allow others to do so. The process of your review of the Audit
Working Papers and Additional Explanations will not be videotaped or otherwise recorded.]

15. Please acknowledge that you accept these terms by signing, dating and returning this letter to
us.

Yours faithfully

[Signature of Partner]
[Predecessor Auditor]

We accept the terms on which access to the Audit Working Papers and Additional Explanations is
to be provided.

[Signature of Partner]
[Successor Auditor of entity]
[Date]
DISCLAIMER

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© 2023 The Malaysian Institute of Certified Public Accountants

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